Yes they can, and the syntax is the same for posting from your own site:<img src="http://www.tamba2.org.uk/images/huge.jpg" alt="" />
Drop that into your page, and whatever is at the other domain link will appear on your page.
This is hotlinking though - so have permission for it.

Please note that "hotlinking" is usually frowned upon--every time your page with that image loads, you are loading the image from their server & using that site's bandwidth.
You should probably save a copy locally, then use the "upload" feature. That should automatically generate the code that you need to include in the post.